If the market increases by 6-8% annually, how can someone in the future afford to buy even one stock if their income does not increase proportionally?

Question

If the market increases by 6-8% annually, how can someone in the future afford to buy even one stock if their income does not increase proportionally? Won’t stock prices increase 6-8% indefinitely prohibiting anyone from buying them? Also if the market crashes to correct the increases, how can anyone make a profit off long term investments without timing the market? I would like to invest in broad index funds but don’t quite understand how my money will increase if there is always the risk of a correction crash before I retire and take my money out of index funds. Thank you.

In: Economics

Answer 1

Well it doesn’t always increase annually. From 2000-2011 you would have lost money counting inflation.